Kachikwu’s new gas flaring deadline, BY Jerry Uwah

Ibe Kachikwu rattled the oil industry last week with fresh threats on the over-flogged issue of gas flaring.
The minister of state for petroleum may not be a man of many words, but the international oil companies (OICs) in Nigeria are used to empty threats about gas flaring deadlines.
Kachikwu’s threat might as well have been dismissed as one of the rantings of a toothless bulldog that barks menacingly but cannot bite.
At a forum organized by operators of the gas industry, Kachikwu issued a warning that implicitly shifted forward the deadline for the ending of gas flaring by one year.
The federal government had at the dying days of 2017 set 2020 as deadline for the ending of gas flaring in Nigeria’s oil fields.
At the forum in Abuja on September 24, Kachikwu warned that by 2019 any oil firm that continues to flare gas would have to stop oil production.
The minister stressed that the federal government was seriously considering the withdrawal of licenses from oil producing firms that would fail to halt gas flaring.
The current threat by the minister is a serious matter given the tight deadline he has handed the oil firms to end a practice that has become a norm in the industry.
The industry is yet to respond to the minister’s threat but it is obvious that operators might have dismissed the threat as the empty rhetoric of a flippant Nigerian politician.
The industry is used to such deadlines.
The last one was issued in 2008 when the operators were given 2010 as deadline for ending gas flaring.
Since the end of the 2010 deadline, gas flaring has only increased in Nigeria’s oil fields.
The phenomenon rose from 244.84 billion standard cubic feet (bscf) in 2016 to 287.59 bscf in 2017.
Even the pittance that the federal government imposes as penalty for gas flaring is not being paid regularly by the lawless oil firms.
Kachikwu’s new threat amounts to shutting down Nigeria’s oil industry because the facts on the ground suggest that the oil firms would still flare gas even beyond 2020 if they must produce oil.
Ironically, the minister knows that Nigeria needs the proceeds of the oil from its fields more than the multi-nationals operating in the industry.
If Kachikwu carries out his threat in 2019 by withdrawing the operating licenses of the defiant oil firms, most of them would retreat to other parts of the world where they have operated for decades and obeyed the laws of the land.
The oil firms would lose reasonable revenue, but the biggest loser would be Nigeria’s one-handed economy.
Nigeria depends on the oil industry for close to 90 per cent of its revenue and 70 per cent of its foreign exchange.
Africa’s largest economy would simply grind to a halt if Kachikwu carries out his threat.
The oil firms know Nigeria’s economy like their palm.
They know that Nigeria cannot afford a showdown with the industry.
The solution to the environmental calamity imposed on Niger Delta by gas flaring is not in empty unenforceable threats but in concrete steps to end the phenomenon.
The Nigerian National Petroleum Corporation (NNPC) must lead by example if gas flaring must end.
The multi-nationals operating in Nigeria’s oil fields are in joint venture with NNPC.
As Kachikwu himself rightly admitted while issuing the recent threat, the issue of cash call is at the centre of the oil firms’ reluctance to invest in infrastructure that would effectively end gas flaring and divert the essential natural resource to economic use.
An odd combination of legislative, regulatory and infrastructure challenges hinder the realization of the tight deadline on ending gas flaring.
The Petroleum Industry Bill is yet to be signed into law.
The industry is still waiting for a law that would eventually set the rules of the game in Nigeria’s oil fields.
Until that happens, no one knows precisely how to encourage the infrastructure development that would drive the enforcement of a final ban on gas flaring.
Pipeline development and installation of gas processing plants are huge investments that could only be driven by full deregulation of gas price.
Besides, the Department of Petroleum Resources (DPR), the regulator of the oil industry with the sole responsibility of monitoring the eventual compliance with the ban on gas flaring, lacks the resources to carry out that function.
Kachikwu who announced the new deadline on gas flaring with a threat is not qualified to issue such threat.
NNPC, the state oil behemoth under his supervision, is as guilty of gas flaring offences as the multi-national oil firms being castigated by indigenes of Niger Delta.
NNPC is a joint venture partner with the multinational oil firms in all the major oil fields.
In the event of enforcing the tight gas flaring deadline, the oil firms would have to build gas pipelines stretching for hundreds of kilometers to the areas where the processed gas would eventually be consumed.
That would cost billions of dollars.
A chunk of the bill would be paid by NNPC as a joint venture partner.
With the corporation’s delinquent history in cash call payments, no one expects the pipelines to be laid within the 15 months that Kachikwu hopes to end gas flaring

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